Startups Team Up to Remake Grid Transmission

Transmission lines — which carry power from power plants to the distribution point where electricity can then light up our houses — are getting an unusual dose of the entrepreneurial spirit. Tres Amigas, a Santa Fe, N.M-based startup that has an audacious proposal to build a transmission hub to connect the U.S.’s three major grids in the east, west and Texas, announced today that it is working with another smart software energy startup Viridity Energy.

Viridity Energy is a 2-year-old company which makes software that dynamically manages loads on the grid in terms of energy pricing, renewable energy generation and energy storage. For the Tres Amigas deal, Viridity would build both the network and the commercial operations that will manage the sale and transmission of power at the transmission hub. The hub would create a market for utilities and power producers to buy and sell clean power across the three grids and could encourage the installation of a lot more solar and wind projects.

As utilities work to get more of their electricity from renewable projects, transmission is becoming a major barrier. The grid is aging and, in the U.S., many lines are reaching the end of their design life. California alone will need seven new transmission lines if its investor-owned utilities are to reach the state’s goal of getting 33 percent of its electricity from renewable sources by 2020, according to the California Public Utilities Commission.

Tres Amigas’ plan is to build a so-called “SuperStation” — the mother of all substations — that would use superconducting cables from American Superconductor Corp., which can carry 5,000 MW of electricity, are super-chilled to minus 300 degrees Fahrenheit, and can boost the lines’ carrying capacity. The substation itself would convert the alternating current (AC) from the three grids into direct current (DC) and then back to AC in order to move the electricity back out onto the three grids in an efficient and reliable way.

Tres Amigas and other companies like American Transmission Company think the future of remaking the power grid will be tightly connected to the use of superconducting high-voltage direct current power lines. (For more on HVDC lines see this article.)

Tres Amigas’ project has gotten an endorsement from New Mexico Governor Bill Richardson to build the transmission link in the city of Clovis. While the U.S. already has a couple of substations that link two of the nation’s grids via the AC-DC conversion, Tres Amigas says this would be the first one that would be able to synchronize electricity from all three grids. That means the three grids can finally share power, and it will create what Tres Amigas calls, “a power market hub.”

The tech might be cutting edge, but the business model is where the real innovation lies. Envisioned by the founder and CEO, Phil Harris, who was the CEO of PJM Interconnection, Tres Amigas plans to charge a fee for use of the SuperStation. There’s not a lot of outside-the-box business going on in the heavily regulated transmission sector, so it will take a true entrepreneur to put all these pieces together.

A variety of hurdles will make this project very difficult to implement, however. First up, the hurdle that faces all transmission lines: bureaucracy. While the project doesn’t necessarily come under the jurisdiction of the Federal Energy Resource Commission (because of the unique power environment of Texas), the company still has to file documents with FERC.

Then there’s the financing. The Wall Street Journal reported last year that the project could cost a whopping $1 billion to build, so the company will need to raise a lot of funds. Never mind other, smaller issues, like NIMBYism, and coordination among what will probably be a lot of partners for the project.

For a relatively new startup Viridity Energy seems to have found a lot of partners for its service in addition to Tres Amigas. Siemens is working with Viridity, to combine Siemens’ decentralized energy management system with Viridity’s system for managing “virtual power plants,” a collection of loads and distributed generation resources at office parks, university campuses or other discrete entities. Viridity Energy is also involved in two stimulus-funded projects, one with Consolidated Edison in New York City, and another with PECO at the Philadelphia campus of Drexel University.

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